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What teenagers should know about summer jobs and taxes

By: Donna Wick Publicity
| Published 06/01/2015

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THE WOODLANDS, Texas – Summer is here and students will soon be hitting the pavement in search of summertime employment, unaware of possible financial and tax pitfalls. Before starting work, it’s important for students on summer break to know how to fill out tax forms and how to report income from a seasonal job. Parents and students need to be aware of how a full or part-time job can affect their taxes at the end of the year.

Local tax expert discusses summer jobs and taxes


Dianne Ketcham, owner and manager of Liberty Tax Service in Spring, advises high school and college students to claim zero allowances on their W4 form. “For young people getting a summer job, they usually have no spouse and no dependents so there should be no allowances,” Ketcham said. In addition, if income from a summer job is expected to be under $6,000, students can claim exemption from withholding on line seven of the W4 form, provided that social security is being taken out of their paycheck.

One mistake that parents of young workers sometimes make is to add their child’s earnings to the total household income at tax time. “Parents should remember not to add their children’s income to their own when filing their tax returns,” Ketcham said. “The student or dependent will file their own tax return for 2015. The parents should still claim the student as a dependent.” Parents may claim their children as dependents while they are attending college until the age of 24. “The only exception,” Ketcham said, “is for students who take a contract job and social security is not taken out, they will be required to file a tax return to pay the social security.”

Another consideration is income from tips and self-employment. Employees who earn tips are required to keep a log of those earnings. Any tips in excess of $20 per month must be reported on a year-end tax return. Self-employment includes babysitting, lawn-mowing or any type of paid service. “If you run your own business, you will need to file Schedule C to pay self-employment taxes if you earn more than $400, although you may qualify for an exception,” Ketcham said. She also suggests that anyone who is self-employed should keep track of their business expenses. “Expenses can be deducted from income before paying self-employment tax.”

The professionals at Liberty Tax Service are available for assistance year round at 440 Rayford Road in Spring. Visit www.libertytax.com or call 832-447-1800 for more information.

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